Is your company taking enough money for your retirement? If your head is buried in the sand and you aren’t 100% sure of the numbers, then this is a modern fable you have GOT to listen to!

Most people think of retirement as this wonderful, glowing phase of life… and it should be!  But it only will be if you plan in great detail what the journey of retirement will look like. And you need to know how you are going to pay for it.

It is so important that you KNOW YOUR NUMBER, and start to live a life now according to what you can afford.

Show Notes

• [01.00] A modern fable

• [12.51] Good reasons and real reasons
  

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Quotes

"The more work I do with people though, the more I realise how few people actually have any idea of how much they need to retire." - Lisa Linfield

"The assumption is that HR knows what they are doing and has it all sorted." - Lisa Linfield

"You can’t save for a 40 year retirement in 8 years." - Lisa Linfield

"Never assume that the company is taking enough money for your retirement – they have NO idea about your personal circumstances, and generally take less than half what you need to save." - Lisa Linfield

"So KNOW YOUR NUMBER, and start to live a life now according to what you can afford." - Lisa Linfield

Transcript:

Hello everyone and welcome to today’s episode of Working Women’s Wealth.  I’m Lisa Linfield and I’m building a community of Women who are committed to the journey of living Financially Free lives – so that we can have the money that enables us to CHOOSE – IF we want to work, where we work, and when, so that we can follow our dreams.

Now I’m going to tell you a fable, a story and I want you to journey with me.  I want you to imagine yourself in this story (letting go of all your ifs and buts), and just go with it.

Imagine you and your partner have always wanted to go on a journey from Cape Town to Cairo.  Whilst you’ve spoken about this trip vaguely as something you’d all like to do, you’ve never done more than just shoot the breeze with random thoughts as to what its going to be like.

It’s going to be so cool.  You’re going to have so much fun, it’s going to be chilled out, and there are going to be amazing sights along the way.  And what’s best, is that there’s going to be NO work and NO stress!!!  And, for the longest time you’d each been saving a little through the company “bucket list” program for this once in a life-time trip. They had offered it as a salary deduction when you did all that sign on paperwork with HR when you took the job – and when Bob joined the company, he added it too.  It was lucky that both of you worked for the same company – and it was really committed to making sure their people lived their best lives both now and in the future.

Then one bright Wednesday, your boss calls you both into the office and tells you that you’ve now saved enough for your bucket list holiday HR have decided to give you and your husband Bob a year’s sabbatical, starting on Monday, and have got a car ready for you and organised a trip for you both to Cairo from Cape Town.   All you have to do is show up on Monday at the Hire Car shop and your journey will begin.

That weekend is the weirdest weekend ever.  The rest of Friday was all celebration – GnTs flowed, your friends came over for wine to celebrate, and you both couldn’t believe how lucky you were.  But as Saturday dawned, you both were struck by how shell shocked and confused you felt. 

On Thursday you hurried to your friend who was a property rental specialist, and explained that totally out the blue, you’d need your house rented for a year, starting Monday… could she pop a rabbit out the hat?  As it turned out, she had just yesterday seen a couple who had to relocate here for 10 months at short notice, and planned to bring them over on Friday.  So you spent the whole of Thursday packing everything personal into one room that you could lock and leave.

On Friday, after the new tenants had seen the house and loved it, your mind started to turn to what would be needed for the trip.  They said that HR had taken care of packing the car, and getting stuff ready… so what actually did you need to pack?  So you began wandering around the house kind of packing some personal things like medicines and your few favourite snacks, and taking the calls that came from friends and well wishers.

That Saturday night, with a glass of wine in hand, you and Bob watched the sunset dreaming of the journey ahead.  They would of course be sending you off in one of those amazingly kit out Recreational Vehicles or RVs where the two front seats look like thrones and can swivel backwards to join the table where you’d eat your meals together in amazing places.  And there’d be a built in kitchen and bathroom, and one of those double beds that came down from the wall.  It would be kitted out for everything you’d possibly need – and of course they would have surely organised a few lodges for you to stay in along the way.

Bob couldn’t wait for all the fishing he would do along the way, and made sure he had a spare set of lures and trace, and you couldn’t wait for all the books you were going to read.  So whilst he slipped in yet another fishing lure, you slipped in yet another book, and downloaded a few more.

You started to think about the amazing safari’s you were going to go on along the way, and the gorilla’s … oh my goodness, you couldn’t wait for the gorilla’s.  A friend of yours had gone to see the gorilla’s and had said it was the most life changing experience to see these huge gentle giants play with their babies.

And before you knew it, Monday arrived and the two of you bounced like little children at the hire car place.  It was so much fun.  Marge, the hire car manager, greeted you with hot chocolate and biscuits, and spoke excitedly of the trip you were going on.  She’d never done the trip herself, but had spoken to lots of people before they set out, and was sure it was going to be SO MUCH FUN.

Anyway, after all the chit chat, she led you to the car park where you scanned your eyes for the huge RV which should have been easy to spot in amongst the family sedan’s and micro cars that most of the weekday city workers hired as they stopped in for a day of two.

And then you saw it.  A small Toyota – way smaller than your day-to-day runaround… with the backseat packed to the brim.

At first you absolutely knew that there must be some mistake.  Marge’s smile doesn’t even falter… no way!  She’s spent the whole weekend packing it for you, and assures you it’s got everything she’d need for a trip to Cairo.  And in an almost headmistress voice, she says, “run along you two… your journey starts today and you’d better get going if you are to reach the first campsite by the time it closes.”

With eyes in shock, you both walk like Robots to the car, get in and drive it out the hire car yard and around the corner… where your husband starts screaming and you start crying.  To say you’re both so angry you could scream blue murder is an under statement.  How could your boss do this to you?  And HR?  Aren’t they the ones who are supposed to make sure you have enough to get you on this trip?

As you go through the permutations of what could be done differently, and whose fault this was, you realise that you can’t go back to your home… as your tenants have moved in… and after all those celebrations, you’d feel bad to undo everything, kick the tenants out, ask your boss to give you your jobs back and tell your friends you were backing out of your dream bucket list.

So, you decide to set off for the campsite thinking that at least what you can do is spend the next few days seeing the local sights and spend the daily money that was in each envelope they had for you… and in the meantime get on the phone to a real expert who surely will get you a better solution than this tiny car.

And just when you think it couldn’t get worse… you arrived at a 1 star campsite.  There was no where to plug in, no where to recharge your own battery.  So whilst you went to find a spot with signal, climbing up a small mountain, Bob scratched around for the tent and sleeping equipment in the car.

As you finished up with the expert, who promised to get hold of the numbers from HR and confirm your thoughts that you should be travelling in some form of style, even if it wasn’t the very fancy RV and just a caravan, you looked down to see Tom fighting with one of those tiny pop up bubble tent.  Whilst it may be fine for a warm evening like tonight… it absolutely wouldn’t survive a storm, and had no insulation for a cold night.  As you got closer to him, you saw him putting the sleeping bag directly onto the tent sheet, with no mattress in sight.

And just when you thought it couldn’t get any worse, you opened the cash envelope in your pocket to pay for dinner, and realised that it was less than a third of what you usually had – eating at home.  As you reached into your pocket, you remembered that you’d left your cards behind as the woman had said everything was sorted.  And, as you reached for your phone to complain to HR, you saw a text from the person who you’d asked for a second opinion saying that he thought you had a great deal for what you’d saved… and he couldn’t have done any better.

……………………………………..

So here’s the first question most of us would ask when we hear the story… who on earth would set out on a once in a lifetime bucket list journey having no idea about any of the details? 

Who would trust the onboarding person from HR, whom you had a brief discussion with one time when you started working, with the process of saving for and then booking, packing and paying for your bucket list trip needs… without ever having had a detailed discussion of what you wanted to do or needed to do?

 Would they know that your dream was to meet up with the kids and grandkids on the way?…. Or that you would rather have had a shorter time than a year, but at least had a caravan to sleep in?  How would they know your medical needs, or whether you’d any savings towards the trip somewhere else?

Now, for many of you, you’re wondering… interesting fable, but what’s that got to do with me?

This last month has been fascinating in that I’ve spent quite a bit of time with a group of pre-retirees.  They’re all Within 5 Years of retirement and some only a few months away.

But they all have one thing in common.  None of them know how much their retirement funds and investments will give them each month to spend when they stop work.  They all had a sense that it wasn’t enough, but had never been brave enough to ask the question.

One of them got quite angry and shouted that the beep-beep company had been taking money each month towards their retirement …. How on earth could they have got it so wrong????

The more I work with people though, the more I realise how few people have no idea how much they need to retire.  They know they don’t have enough, but despite that nagging feeling, they have never done the work to find out how much they have or need, should be saving or where they should be investing the money.

The assumption is that HR knows what they are doing and has it sorted.

But as I say in my book, Deep Grooves, life is all about knowing the difference between Good Reasons and Real Reasons.  That might be the Good reason you tell yourself to take away the guilt.  But the real reason is that we all want more money to spend now… and saving for retirement stops us from spending now.

If my clients are in their 40s or early 50s, they are still spending money supporting their kids in some form or another… thinking that the kids will soon be off the payroll and THEN they can save.  The problem is, unlike our parents generation, the current generation believes that financial support must continue way beyond school, and even university because we don’t want our kids to have to struggle at university.  So we’ll save after they are able to stand on their own two feet.  But save what and how much for how many years I ask?  The answer is always – till I stop working at 60.  But if your kids are off the payroll at 52… that’s only 8 years… and you can’t save for a 40 year retirement in only 8 years.

And for those closer to retirement, when I ask them what they were thinking would happen if the money wasn’t enough?  The answer is more often than not – when the time comes to running out of money, they joke, they hope they will no longer be around… that they would have died.  Then they won’t have to worry about it.

Friends, I wish I knew when you were going to die.  It would make it a WHOLE lot easier to know how much money you need.  If you only live 2 years into retirement, well then this would be a whole load easier!  But with modern medicine, we’re all going to live longer… and if it happens to be you living to 95, you need to have the money to support it.

Like the story I told, most people think of retirement as this wonderful, glowing phase of life… and it should be!  But we can’t think about it in generalisms – like saying you want to go from Cape Town to Cairo.  You need to plan in a lot more detail what the journey of retirement looks like.  And you need to know how you are going to pay for it.

Never assume that the company is taking enough money for your retirement – they have NO idea about your personal circumstances, and generally take less than half what you need to save – because it makes you feel like you’re earning more as more money lands in your bank account.

And please, please, don’t dig your head in the sand thinking that if you don’t find out what the real number is, then you won’t need to worry about it.  At the back of your mind you are worrying about it and it is a silent stressor… KNOW YOUR NUMBER, and start to live a life now according to what you can afford.  That stress won’t go away, and knowing your numbers will help you get control and make the choices you need to make now – before it’s too late and you have no choice but to live a small life, to journey through retirement in a tiny car with a pop up tent and no protection against the weather.

Friends. Please share this with someone you know… we all need to KNOW OUR NUMBER